FTSE hits a seven-week low as corporates suffer

BRITAIN’S top share index fell yesterday, after downbeat data from China, Europe and the United States darkened the outlook for global growth and corporate earnings.

London’s blue-chip index closed at its lowest level since 6 October, falling 67.04 points, or 1.3 per cent, to 5,139.76.

The index has now fallen 7.3 per cent in November as worries have grown that Europe’s debt crisis could be terminal for the euro and would damage corporate earnings.

According to Thomson Reuters data earnings momentum – analysts’ upgrades minus downgrades as a percentage of total estimates – for FTSE 100 companies is -8.3 per cent, versus -10.8 per cent a month ago.

Mining and integrated oil stocks were among the worst performers, as commodity prices fell after weak data from China and in Europe pointed to a softening in demand.

HSBC’s preliminary China manufacturing survey fell to a 32-month low in November, while Eurozone industrial new orders tumbled by the most in almost three years.

In the United States, consumer spending barely rose in October and initial claims for US unemployment benefit rose slightly last week.

And while new orders for a range of long-lasting US manufactured goods unexpectedly rose in October, sharp downward revisions to the prior month’s data and weak spending plans by businesses suggested manufacturing was taking a breather.

United Utilities, Britain’s largest listed water utility, shed 1.1 per cent after it reported a dip in first-half profits.

Compass Group, the world’s biggest caterer, fell 2.9 per cent as the firm reported in line full-year results, but Evolution Securities said it was likely to trim earnings forecasts to reflect a tougher Eurozone market.

Meggitt slipped three per cent as UBS cut its rating on the aircraft parts supplier to “sell” from “neutral” and reduced its earnings forecasts, following a recent update.

Johnson Matthey shed 1.2 per cent despite posting a 24 per cent rise in first-half profit.